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Mike Loewengart [00:00:00]
You know it's tough to say if it's fully priced in at this point but I think optimism has been priced in in recent weeks. So, trade remains the single largest issue that is on investors minds and it certainly has the impact to move the markets pretty significantly either direction. We're hopeful that progress will continue to be made.

Jacob Sonenshine [00:00:20]
Now when you look at the stocks some of the sectors that are trade sensitive and maybe semiconductors and maybe some industrials some autos. Some of the autos have been up a lot. Some of the semiconductors have been up a lot. So let's just say March 1st and March 2nd, there is great news on the trade front. What's your strategy with the trade sensitive sectors that have come up a little bit?

Mike Loewengart [00:00:50]
Well, economically sensitive sectors in general should rally. Should we get such positive news on the trade front? You know it really becomes a question of the exposure that investors are looking for whether if you want to be defensive we talked about the defensive sectors you can focus on and if you want to have your portfolio more closely tied to the prospects of the broader economy then you want to stay invested in discretionary and industrials materials. Those those would be the names that would stand to benefit.

Jacob Sonenshine [00:01:28]
So those can still, if there's really good news for the autos or for semiconductors or for like you mentioned some discretionary is where you have retailers where you have textiles where input costs in the U.S. are affected those can run up a little bit more. Is this possible?

Mike Loewengart [00:01:48]
Anything's possible. But we see the markets digesting information as it becomes available. And like I said before I don't think of hold this agreement has been priced out of the market and we'll see as we learn more.

Jacob Sonenshine [00:02:04]
Yeah. And actually next thing I was going to say is I mean does it seem likely to you that March 1st, March 2nd we have a sweeping agreement where everything that all tariffs are erased or what sectors are you anticipating there to be if there is good news where there's going to be you know very specific sector good news?

Mike Loewengart [00:02:28]
I think it's unlikely we'll see a broad based comprehensive agreement in the next few days but if we do see more optical more optimism if there is another extension in the level of talks those types of moves would be interpreted as being very positive and we would expect economically sensitive sectors to do well.

March 1 marks the day we all hear from the U.S. and China on the real progress of trade talks.

An agreement is not entirely priced in, one expert said. 

Sectors directly affected (negatively) by tariffs, both from China and the U.S., have run up in 2019. The iShares PHLX Semiconductor ETF is up 18% year-to-date. General Motors Co. (GM - Get Report) is up almost 20% this year. Ford Motor Co. (F - Get Report) is up 13.86% this year. 

Still, "economically sensitive sectors should rally should we get such positive news on the trade front," said Mike Loewengart, vice president of investment strategy at E*Trade. "It really becomes a question of the exposure that investors are looking for." 

Here's the catch:

"We see the markets digesting information as it becomes available, and... I don't think a holistic agreement has been priced into the market," Loewengart said. 

"I think optimism has been priced in in recent weeks," he said.